India to set up gas line to Pakistan

Finance minister Arun Jaitley is seen in this TV screengrab as he announces the Union Budget in Lok Sabha in New Delhi. (HT Photo)

India’s plans of exporting gas to Pakistan via a pipeline from Jalandhar in Punjab to the Wagah-Attari border will soon become a reality.

In his maiden Budget presented in the Lok Sabha on Thursday, finance minister Arun Jaitley exempted liquefied natural gas (LNG) imports from customs duty if it is meant for onward sale to the neighbouring nation.

“Exemption from basic customs duty (of 5%) is being granted on re-gassified LNG for supply to Pakistan,” the Budget said.

This will set the stage for the state-run Gail India Ltd, which plans to build a `500-crore pipeline to export five million units per day of regassified-LNG to Pakistan, to start work on the ground.

“Its an important project that will help improve bilateral diplomatic and economic ties between the two neighbours,”Dharmendra Pradhan, minister of state for petroleum, told HT.

“Broad parameters have been agreed to and a contract will also be signed shortly between the two sides after which it will take one year to build it,” Gail CMD BC Tripathi told HT.

Interestingly, citing security concerns, New Delhi has put on hold a plan to be part of a `10,000-crore pipeline originating in Iran, passing through Pakistan and terminating in India to carry gas from Iran’s South Pars gas fields. Security experts felt that being dependent on gas coming via Pakistan could compromise India’s energy security.

But the Gail pipeline will be built entirely on Indian territory and terminate at the border, thus, making it relatively safer.

Faced with a serious gas shortage, Pakistan wants to import gas from India. Gail will import LNG in ships at ports on the Indian west coast and then pipe the gas to Jalandhar. The proposed 110-km pipeline will then carry the fuel to the Wagah-Attari border, from where Pakistan will supply it to Lahore.

The source added that Gail, which imports LNG at $13-14 per unit, would sell the gas to Pakistan at around $21. The cut in customs duty will bring down the cost.